Financial Information for the Year Ended December 31, 2008
2008 NET SALES UP 1.1% AT CONSTANT EXCHANGE RATES AND 5.6% OPERATING MARGIN
BEFORE NON-RECURRING ITEMS
In 2009, Michelin will focus on managing its cash by optimizing production program
management and sharply reducing capital expenditure
- 2008 sales volumes down 2.9% (-16% in the fourth quarter due to the steep fall-off in demand)
- Price-mix still highly favorable (+4.2%), reflecting the strength of the MICHELIN brand and the effectiveness of the price increases implemented in 2008
- Operating income before non-recurring items down 44% led by the decline in sales volume, the increase in raw materials prices and the cost of idle capacity
- Mid-term competitiveness improvement objectives and expansion projects in high-growth potential markets maintained
- Proposed EUR 1 dividend per share submitted for approval at the Shareholders Meeting ofMay 15, 2009
Michel Rollier, Managing Partner, stated: "In response to the prevailing bearish outlook for the coming months, Michelin is strengthening the management of its production programs in order to increase plant flexibility, tighten inventory management and optimize cash. We have decided to
reduce our capital spending substantially in 2009 while maintaining the key orientations of our midterm strategy. We will further enhance our competitiveness, strengthen our leadership without compromising the value of our products and broaden our footprint in the growth regions. This way, we’ll be ready to rebound as soon as the markets recover".
At this stage, Michelin's working assumptions are as follows:
- Tire markets will remain well below prior-year levels in the first half, before firming up as replacement market inventories are replenished and business activity begins to recover.
- In 2009, Michelin's profitability will be supported by the full-year combined effect of the price increases passed in 2008 and the decline in raw materials prices, in particular for natural rubber and oil derivatives.
- Plant flexibility will be enhanced, while capital expenditure will be cut to around EUR 700 million, with an emphasis on driving further expansion in the new, high growth potential markets.
Michelin is therefore focused on improving its profitability and preserving its robust financial position.
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This press release is not an offer to purchase or a solicitation to recommend the purchase of Michelin shares. To obtain more detailed information on Michelin, please consult the documents filed in France with Autorité des Marchés Financiers, which are also available from the www.michelin.com website.
This press release may contain a number of forward-looking statements. Although the Company believes that these statements are based on reasonable assumptions as at the time of publishing this document, they are by nature subject to risks and contingencies liable to translate into a difference between actual data and the forecasts made or inferred by these statements.